Federal Benefits and Retirement

Maximize your Benefits

By Planning Ahead

While there is no magic, our super-power at Reliance is the ability to help you plan ahead.
This isa free report available to all federal employees, including the Post Office. It will tell you where you
are and where you are headed. It won’t discuss products or what you should buy, but it will arm you
with the information you need to make the best choices now and at retirement.

This report takes into account your many types of Retirement.

Voluntary Retirement

The most common type of retirement. Eligibility is primarily based upon age and the number of years of creditable service at retirement.

Early Retirement

Although this type of retirement is similar to Voluntary Retirement, , there are different age and service requirements, and the annuity may begin at an earlier age than a Voluntary Retirement. Early Retirement provisions often have other special requirements.

Disability Retirement

Disability Retirement has specific medical requirements and service requirements. Disability Retirement also has a different annuity computation than Voluntary Retirement.

Deferred Retirement

Former Federal employees who were covered by the FERS may be eligible for a deferred annuity at age 62 or the Minimum Retirement Age.

Phased Retirement

In Phased Retirement status the retiring employee works on a part-time basis for a limited period. During that time, the employee’s pay is split between employee pay and annuity payments. The employee also continues to receive additional service credit towards full retirement.

Reductions in Non-Disability Annuity

Age

If you retire under the MRA+10 provision

If you have 10 or more years of service and retire at the Minimum Retirement Age (MRA), your benefit will be reduced by 5/12 of 1% for each full month (5% per year) that you were under age 62 on the date your annuity began. However, your annuity will not be reduced if you complete at least 30 years of service, or if you complete at least 20 years of service and your annuity begins when you reach age 60.
If you postpone the beginning date of your annuity, the age reduction will be reduced or eliminated.
The age reduction applies to both the Civil Service Retirement System and the Federal Employees Retirement System components of your annuity, if you transferred to FERS and part of your annuity is computed under the CSRS provision.

If you retire under the discontinued service or early optional retirement provision with a CSRS Component

If you retire on a discontinued service retirement or early optional retirement because your agency was undergoing a major reorganization, reduction-in-force or transfer of function, and part of your benefit was computed under CSRS rules, the CSRS portion will be reduced if you are under age 55. The reduction is 1/6 of 1% (2% per year) for every month that you are under age 55 at the time of retirement.

Survivor Benefits

If you are married, your benefit will be reduced for a survivor benefit, unless your spouse consented to your election of less than a full survivor annuity. If the total of the survivor benefit(s) you elect equals 50% of your benefit, your annuity is reduced by 10%. If the total equals 25%, the reduction is 5%.

New Retiree

When you’ll get your first payment

In most cases, as soon as we get all your retirement records, we provide “interim” payments. These payments represent a portion of your final benefit and are usually made on the first business day of each month. We try to provide you with income until we finish processing your application. View the annuity payment schedule.

Withholdings from interim payments

We only withhold Federal income tax. You may find that the Federal income taxes withheld from your first interim payment will be higher than the Federal tax withholdings from your subsequent interim payments and regular annuity. We will make any necessary tax withholding adjustment when we finish processing your application. Your health and life insurance coverage will continue while you are receiving interim pay. We will begin withholding health and life insurance premiums retroactive to the commencing date of your annuity, when we finish processing your application.

What you will receive when the Office of Personnel Management finishes processing your application

We will send you a personalized booklet titled “Your Federal Retirement Benefits”. It details, among other things, how much your monthly payment will be. It also confirms such things as health and life insurance coverage, and provides information you will need to prepare your tax returns.

Credit for Federal civilian service if you didn’t make retirement contributions

Under the Federal Employees Retirement System (FERS), you will be given the opportunity to pay for temporary service prior to January 1, 1989. Under the Civil Service Retirement System (CSRS), if you had service on/after October 1, 1982, for which no contributions were made, we will give you the opportunity to pay the contributions, and will tell you what difference it makes to your monthly benefit. If you had unpaid service prior to October 1, 1982, we do not notify you before we finish processing your application because it generally is not to your advantage to make the payment.

Changing your health insurance coverage after retirement

After you retire, you will still have the opportunity to change your enrollment from one plan to another during an annual open season. You cannot change to another plan simply because you retired.

Federal Employees Health Benefits (FEHB) Program qualifies as minimum essential coverage (MEC) and meets the Patient Protection and Affordable Care Act. For more information, please visit the website (click here).

If you are a Federal annuitant enrolled in the FEHB Program and if you decide to cancel your FEHB enrollment, you should be aware of the consequences of canceling your FEHB enrollment including the following but not limited to:

You CANNOT re-enroll in the FEHB Program.
You and your enrolled family members will not be eligible to enroll in temporary continuation of coverage or convert to a nongroup contract; in addition, the 31-day extension of coverage does not apply to cancelled enrollments.
If you die, you will not have an FEHB Self and Family enrollment for your survivors to continue, even if they are eligible for a survivor annuity.

Changing your life insurance coverage after retirement

You can cancel or decrease your coverage at any time. You cannot increase your coverage. Once you cancel your life insurance coverage it can NEVER be reinstated.

Amount of cost-of-living increase you will receive

We will prorate the first cost-of-living increase based on how long you were retired before it is given. At that time, we will send you a notice explaining the increase. Federal Employees Retirement System (FERS) cost-of-living increases are not provided until age 62, except for disability and survivor benefits.

Taxable portion of your retirement benefit

Use our calculator to figure the tax-free portion of your annuity payment.

Use our calculator to figure the amount of your monthly federal income tax withholding.

Then, use Services Online to change the federal tax withheld from your annuity payment.